U.S.D.A. forecasts lower wheat and corn but record area for soybeans

WASHINGTON — The U.S. Department of Agriculture in an outlook issued on Feb. 21 at the Agricultural Outlook Forum in Washington forecast the area planted to wheat for harvest in 2014 at 55.5 million acres, down 0.7 million acres from 56.2 million acres in 2013. The forecast for the current year compared with the recent five-year average planted area at 55.8 million acres. The largest area planted to wheat in the past 10 years was 63.2 million acres in 2008, and the smallest area planted to wheat in the past 10 years was 53.6 million acres in 2010.

The outlook noted the winter wheat area for harvest this year was estimated at 41.9 million acres in the Winter Wheat Seedings report issued by the department on Jan. 10. That estimate was affirmed. That meant the U.S.D.A. expects 13.6 million acres to be planted to spring wheat (including durum) this spring. The spring wheat planting forecast assumed “a return to more normal weather reduces prevented plantings of both hard red spring and durum wheat in North Dakota.” The U.S.D.A. added, “Large supplies in Canada, however, limit producer incentives to expand spring wheat area in the northern Plains.”

The U.S.D.A. forecast corn plantings this spring at 92 million acres, down 3.4 million acres, or 4%, from 95.4 million acres in 2013. It would be the smallest area planted to corn since 91.9 million acres in 2011 and compared with the recent five-year average area at 91.8 million acres.

The U.S.D.A. noted, “New crop (corn) prices in both futures and cash forward markets are down sharply from last year at this time as record 2013 production allows stocks to build for the first time in four years…These lower prices sharply reduce expected market returns and crop insurance revenue coverage levels for 2014 corn. While an assumed return to more normal spring weather will sharply reduce prevented plantings, this year’s planted area is expected to be well below the 97.3 million acres producers reported as intended area in last March’s Prospective Plantings report.”

The U.S.D.A. projected soybean plantings in 2014 at a record 79.5 million acres, up 3 million acres, or 4%, from 76.5 million acres in 2013 and compared with 76.7 million acres as the recent five-year average planted area.

“Although new crop soybean futures prices and current forward pricing opportunities are lower than last year at this time, pricing opportunities relative to corn are better,” the U.S.D.A. said. “With a sharper decline in expected net returns for corn compared with soybeans, producers are expected to favor rotations that include less corn-on-corn planting, thus expanding the area that will be planted to soybeans in 2014.”

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